Bitcoin soars past $94,000! Coinbase premium turns positive, institutional giants return to the market

In early 2026, Bitcoin surged to a high of $94,789, clearing the gloom of dropping below $87,000 in December. The three major indicators have turned bullish: Coinbase premium rebounded from -150 back toward the zero line, the Fear & Greed Index rebounded from 29 to 40, and the bull-bear ratio remains above 1.0. Analysts warn that the current situation is more suitable for cautious accumulation rather than blind chasing.

Coinbase Premium V-Shaped Reversal Confirms Dollar Buying

(Source: CryptoQuant)

The first bullish signal that catches the eye comes from U.S. investors, especially institutional fund flows. The “Coinbase Premium Index,” which measures the difference in buying power between the U.S. and global markets, is performing a V-shaped reversal. After plummeting to -150 at the end of December, it has now significantly rebounded toward the zero line. The logic behind this indicator is that when Coinbase (the largest compliant exchange in the U.S.) Bitcoin price exceeds the global average, the premium is positive, indicating strong dollar buying; conversely, a negative premium suggests U.S. market selling.

The extreme negative premium of -150 at the end of December reflects the concentrated selling pressure at year-end. U.S. institutional investors, engaging in tax loss harvesting, sold large amounts of loss positions to offset taxes. This technical maneuver caused Coinbase prices to fall significantly below the global average. However, when the new fiscal year begins in 2026 and tax accounts reset, these forced-out funds start to flow back in.

In other words, after the year-end selling pressure subsides, U.S. institutional investors return to the “buy side.” If the Coinbase premium further turns positive and stabilizes, it confirms the “dollar buying” has officially returned, often serving as a leading indicator for Bitcoin’s rally. Historical experience shows that the two major rallies in 2021 and 2024 were accompanied by sustained positive Coinbase premiums.

Although the current premium index has not yet turned positive, the rebound from -150 to near zero is a significant improvement. Analysts emphasize that to confirm a complete trend reversal, the Coinbase premium must decisively turn positive and hold steady, indicating institutional funds have fully entered. Until then, the current rebound may still be a technical correction rather than a genuine confidence revival.

Fear & Greed Index Exits Extreme Panic Zone

Market sentiment is also improving in tandem. The “Crypto Fear & Greed Index,” which combines volatility, trading volume, social sentiment, market momentum, and other factors, has risen from 29 last week to 40. This indicates the market has officially exited the “extreme panic” zone. Although different platforms show slightly different values (CoinGlass shows 26, Binance shows 40), the trend of “fear receding and confidence returning” is quite clear.

The Fear & Greed Index considers multiple dimensions, including market volatility, trading volume, social media sentiment, Bitcoin market dominance, and Google search trends. When the index drops below 25, it is generally seen as “extreme fear,” often corresponding to mid-term bottoms; when above 75, it indicates “extreme greed,” often signaling short-term tops.

The current score of 40 suggests the market has shifted from extreme panic to a neutral-cautious zone. This emotional recovery is healthy, as it eliminates the most extreme pessimism without overheating into greed. From a trading strategy perspective, when the fear index is between 30 and 50, it is often a better accumulation point, avoiding chaotic panic selling and the trap of chasing highs.

It is worth noting that although the Fear & Greed Index has rebounded, it remains in the “fear” zone (below 50), reflecting investor doubts about the Federal Reserve’s policy direction. Especially after the hawkish signals from the December FOMC minutes, the market has readjusted expectations for rate cuts. This “cautiously optimistic” sentiment may be the most accurate reflection of the current market.

Bull-Bear Ratio Maintains Above 1.0, Indicating Healthy Structure

Derivatives market data also supports a bullish outlook. The Bitcoin “Long/Short Ratio” has recently fallen due to deleveraging but remains above the critical 1.0 threshold. When the ratio exceeds 1.0, it indicates that the futures market has more funds betting on price increases (longs) than on declines (shorts).

Current data shows that the market structure is experiencing a healthy cooling rather than a panic crash. This deleveraging process reduces the risk of large-scale cascade liquidations in the future. Historically, many of the 2024 crashes were triggered by excessive leverage and crowded long positions, which, when prices dipped slightly, caused chain reactions of liquidations, leading to a stampede downward. The current bull-bear ratio, although slightly lower, remains above 1.0, indicating longs still hold the advantage, and leverage levels have decreased to a healthier level.

The Three Major Indicators’ Synergistic Validation Logic

Coinbase Premium Represents Capital Flows: The buying and selling behavior of U.S. institutional investors directly determines short-term capital flows. The rebound in premium confirms dollar buying has returned.

Fear & Greed Index Represents Sentiment: From extreme fear to neutral-cautious, it shows the capitulation selling has ended and market psychology is recovering.

Bull-Bear Ratio Represents Positioning: Long positions still dominate but leverage is healthy, reducing chain liquidation risks and providing a stable structure for subsequent rises.

The three indicators all turn bullish simultaneously, forming a threefold validation of capital flows, sentiment, and positioning. This multi-dimensional confirmation is more reliable than relying on a single indicator. However, the recent rebound may partly be due to the end of year-end “tax selling pressure,” which is a technical correction rather than a full confidence revival. Analysts emphasize that before macroeconomic variables are fully resolved, traders should adopt a “cautious accumulation” strategy rather than “blindly chasing highs.”